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Canada’s oil sands sector has experienced sustained cost-cutting, restructuring and deeper than anticipated job cuts in 2016, but a modest recovery of about 3,450 net job growth is projected over the next four years as companies shift their spending from expansion to maintenance, repair and optimization of their operations, according to PetroLMI’s latest labour demand outlook report.

The report, Oil Sands Labour Demand Outlook to 2020 Update, is an update to the February 2016 Labour Demand Outlook to 2020: Oil Sands Construction, Maintenance and Operations and is based on new production, capital expenditure and labour productivity assumptions.

Some key findings:

With oil prices hovering around US$50 (West Texas Intermediate) per barrel and some new hiring commencing, a modest recovery is projected over the next four years. A total of 3,450 net new jobs are projected for the construction, maintenance and operations sector, and another 3,205 jobs could potentially be required to replace those eligible for retirement.

Jobs in on-site construction and module fabrication will decline by 6,500 but will be offset by an increased requirement for 9,950 workers to support ongoing operations, maintenance and turnaround activities.

The majority of the oil sands sector’s capital spending over the forecast period is expected to shift from growth and expansion towards maintenance, repair and optimization of operations in order to drive operational reliability and efficiency.

Some oil sands companies with expansion projects underway before the downturn have benefitted from cost reductions and were able to accelerate their construction. As a result, they have begun to hire new workers in preparation for moving the projects into operations in 2017 and 2018.

Going forward, with the recent approval by the Government of Canada of two pipeline projects as well as the announcement of some smaller expansion projects, signs of optimism are beginning to emerge.

Oil Sands Labour Demand Outlook to 2020 Update is one of a series of employment outlooks released by PetroLMI. An update to Canada’s Oil and Gas Industry: Labour Market Outlook 2016 to 2020, which includes other sectors such as exploration and production and pipelines, will be released in the spring of 2017.